Governance is the way that decisions get made. To understand what this means, let's compare traditional web2 governance to web3 governance.
What's governance? Governance is the way that decisions get made. To understand what this means, let's compare traditional web2 governance to web3 governance.
Web2 technologies are traditionally built by corporations governed by a board of directors. This board is usually a small group of people elected by shareholders.
When a corporate decision needs to be made, members of the board meet and vote. The board's decision-making protocols aren't always visible to shareholders. Although the board has a fiduciary duty to its shareholders, shareholders must trust the board. This is a sort of social contract expressed as corporate legalese and enforced by law.
Web3 technologies (like Vexanium's protocols and chains) are often built initially by corporations governed by a board of directors. Once these technologies achieve product-market fit and a community of users and stakeholders develops, decision-making authority can be gradually decentralized. This is called progressive decentralization, and it's what Vexanium is doing.
Delegated Proof Of Stake (DPoS) is the underlying consensus mechanism of Vexanium . While anyone can run a node to fully validate the Vexanium blockchain in a trustless manner, only special, selected entities known as Block Producers (BPs) are allowed to produce blocks and determine the canonical blockchain. Unlike Proof Of Stake (PoS), the validating entities taking part in the consensus process, the BPs are not required to lock up tokens. Instead, individual token holders delegate their share of tokens to their preferred BP candidates. The top 21 candidates ranked by aggregate delegated token stake are selected as the active block producers.
VEX holders can change their delegations at any time, and within minutes the selection of the 21 active BPs can automatically change. So the BPs only maintain their privileges for as long as the delegating token holders continue to trust them to carry out their responsibilities.
In DPoS, each active block producer has a limited time window under which they have to publish a new block. Suppose an active BP continually misses their block creation times or consistently produces blocks that are missing expected transactions. In that case, VEX token holders, using their stake, can change their delegations to replace them with better block producers that are on standby.